CHAKARDHARPUR BIRI AND TOBACCO MERCHANTS ASSOCIATION Vs. STATE OF BIHAR

JUDGEMENT

(1.) This writ application under articles 226 and 227 of the Constitution of India has been filed by Chakardharpur Biri and Tobacco Merchants' Association and two of its members. As stated in the application, petitioner No. 1 is a registered association of biri merchants at Chakardharpur and has a total number of twenty-five merchants engaged in that trade. In this application, the petitioners have challenged the vires of Ordinance No. 107 of 1971. The petitioners have further made a prayer for quashing the notice (annexure 2) and for directing the respondents to forbear from interfering with the trade of the petitioners and from levying, realising or collecting additional sales tax under the aforesaid Ordinance or any law made in that behalf.

(2.) The Bihar Sales Tax Act, 1959, received the assent of the President on 28th April, 1959 and the assent was first published in the Bihar Gazette (Extraordinary), dated 1st July, 1959. under Section 3 of the Bihar Sales Tax Act, 1959, hereinafter to be called "the Act", every dealer was made liable to pay general sales tax, special sales tax as also purchase tax subject to the other provisions of the Act. Under Sub-section (3) of Section 4 of the Act, the State Government was authorised by notification to exempt from the levy of general sales tax or special sales tax or both, sales of any goods or class or description of goods, sales of any goods or class or description of goods to or by any class of dealers and any sale or category or description of sales. By notification dated 1st July, 1959, issued by the Governor of Bihar in exercise of the powers conferred by Clause (a) of Sub-section (3) of Section 4 of the Act, exemptions were made in respect of sales of goods specified in the schedule to the notification. Under the notification biri was one of the goods in respect of which exemption was made both with regard to general and special sales tax. It appears that the notification dated 1st July, 1959, was superseded and substituted by Notification No. STGL/68-12570 F. T. dated 27th December, 1968, which was published in the Bihar Gazette (Extraordinary) on 28th December, 1968. Under that notification also biri was exempted from the levy of both general and special sales tax and that notification is still in force.

(3.) On 19th November, 1971, the Governor of Bihar made and promulgated Bihar Ordinance No. 107 of 1971 called "the Bihar Sales Tax (Fourth Amendment) Ordinance, 1971". By Section 2 of that Ordinance, Section 3B was inserted in the Act, which read as follows : 3B. Charge of additional tax.-(1) Notwithstanding anything contained in Sub-section (3) of Section 4, or Sections 5, 6, 6-A or 7 or in any notification issued thereunder, every dealer liable to pay tax under Section 3 or Section 3A shall, with effect from the 1st December, 1971, pay an additional tax at such rate, not exceeding one per centum of his gross turnover, as the State Government may, from time to time, by notification in the official Gazette, fix : Provided that in the case of declared goods, as defined in the Central Sales Tax Act, 1956 (Act 74 of 1956),- (1) where the tax payable under Section 3 or Section 3A equals the maximum amount of tax permissible under Section 15 of that Act, no additional tax shall be payable under this section ; (ii) where the additional tax under this section together with the tax payable under Section 3, or Section 3A would exceed the maximum amount of tax permissible under Section 15 of that Act, the additional tax shall stand reduced to such amount as, together with the tax payable as aforesaid, equals the said maximum amount. (2) The State Government may, by notification and subject to such conditions and restrictions as it may impose, exempt from the levy of additional tax any turnover in respect of any goods, or class or description of goods. By Section 3 of the Ordinance the original Sub-section (1) of Section 9 of the Act was substituted. The new Sub-section (1) of Section 9 read as follows : No dealer, who is liable to pay tax under Section 3 or Section 3A or additional tax under Section 3B shall sell or purchase goods unless he has been granted and is in possession of a valid registration certificate.